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The Finance Department

Hospitality and Business Entertainment

The University is a charity and a large recipient of public funds and therefore all entertainment and hospitality should be minimised.  The definition of business entertainment is events or meals hosted and paid for by the School, where the primary purpose is to provide hospitality to visiting examiners, speakers, prospective or current students, alumni or any other non-staff individuals or organisations.

Contents of this page:

Hospitality

Business Entertainment

Hospitality and Income Tax

Guidelines for Hospitality at Meetings, Staff and/or Student Events

Meeting refreshments (based on SODEXHO prices 2009-10)

Hospitality

Hospitality expenses will only be reimbursed if the event is undertaken in furtherance of College business. No reimbursement will take place if no third parties are present.  Hospitality for visitors should normally be provided by the College caterers, or by caterers at the other College sites. In exceptional circumstances, notably where the hospitality is to be funded from external sources, and where the conditions of the funding so permit, hospitality may be provided at a restaurant. In this case, reasonable expenditure may be claimed. Reimbursement for members of staff will normally be limited to the equivalent of one member of staff per visitor. Claims made in these circumstances must be accompanied by documentary evidence that the expenditure lies within the conditions laid down by the funding body.

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Business Entertainment

Business entertainment expenditure may only be reimbursed if it is an appropriate use of money, and will avoid a tax liability only if it is incurred wholly, necessarily, and exclusively for School purposes.  All expense claims for business entertainment must be authorised by the Assistant School Manager or the authorised signatory to the relevant research grant.

The hospitality claim form should be completed in full with names of all participants and their organisation and full details of the nature of the event.

All expense claims for business entertaining must be supported by appropriate invoices and receipts.

The following information must be shown on Hospitality Expenses Claim Form:-

  • the number of visitors (or students) and the number of School staff
  • the name(s) of all attendee(s), where practicable, including any School staff;
  • the organisation which they represent; and
  • the purpose of the entertainment (for example, “negotiation of contract”).
  • it should be noted that VAT is not recoverable on business entertainment costs.
  • proportion of employees, who of course must be on School business, to visitors or students being entertained should not be more than 2:1.  If you are in any doubt whether an event will qualify as business entertaining because of the ratio of staff to visitors then please check with the Finance Office.

Although the College is a charity not all its activities can be treated as being for charitable purposes. Therefore it is important that business entertainment costs are correctly categorised on the Hospitality Expenses Claim Forms.

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Hospitality and Income Tax

Hospitality expenditure will avoid a tax liability only if it is incurred wholly, necessarily, and exclusively for College purposes.  All expense claims for hospitality must be authorised by the School Manager, Executive Dean, Head of Professional Services Department or other authorised signatories as appropriate.

All expense claims for hospitality must be supported by appropriate invoices and receipts. Where the ratio of staff to visitors exceeds 2 to 1, a tax liability will arise and be charged to the same cost code as the hospitality expense.  Hospitality for meetings or working lunches will not give rise to a tax charge.  Annual Christmas parties will be exempt from a tax charge where these are open to all staff in the school or department.

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Guidelines for Hospitality at Meetings, Staff and/or Student Events

The College provides catering facilities for all staff.  Where refreshments (tea, coffee, biscuits etc but not sandwiches) are provided by the College during a meeting, the person requesting the facility should keep a record of the purpose of the meeting, together with a copy of the agenda or notes/action points, including the name of the person calling the meeting, any external organisation(s) which are present and, wherever possible, the names of all the attendees.

Meetings which involve only School staff (e.g. School or Departmental meetings) must be structured, i.e. with a written agenda and/or brief minutes or action notes.  These should be kept for two years as a tax inspector could ask to see them.

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Meeting refreshments (based on SODEXHO prices 2009-10)

For meetings up to 3 hrs:  Max per head £2.60

BBK Menu equivalent

Tea, coffee

£1.30

2 biscuits / 1 cookie

£0.70

Water / orange juice

£0.55

Total

£2.55

 

For meetings of at least 4 hours: Max per head £8.

BBK Menu equivalent

Working lunch (including 1.5 rounds of sandwiches per person plus fresh fruit & still/sparkling water)

£7.75

 

Student staff; festive etc (with wine): Max £17 per head

BBK Menu equivalent

Pick and mix per person: 2 meat, 2 fish, 2 veg plus 3 extra, i.e. 10 pieces

£7.30
Nibbles £2.20
Water £0.50
Desert £2.05
2 x Glass of Wine max £11 per bottle Fair Trade £3.67
Total £15.72

Working lunches should only be provided where:

  • the lunch is an integral part of the meeting
  • such meetings do not take place frequently
  • full details of the purpose of the meeting, the name of the person calling the meeting and, a list of attendees are given on the reverse side of the claim
  • there is an agenda for the meeting, minutes are kept or there is some other such record of the business discussed

Similar comments will apply where there has been the occasional use of external caterers to provide refreshments. 

Where a meeting has concluded and the attendees have lunch or dinner immediately afterwards the meal cannot be classed as being a part of the meeting.  Claims for evening meals post lecture/event incur tax charges, as do celebratory events (e.g. successful PhDs) meeting.

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Finance Department, Birkbeck, University of London, Malet Street, London WC1E 7HX. Departmental Office tel.:  020 7380 3145, fax.: 020 7380 3221